DaVita is a provider of kidney dialysis services. Chronic kidney disease has no cure, and severe cases require dialysis (the filtering of the patient's blood). While kidney transplants are preferable, there is a shortage of available kidneys. Regularly scheduled dialysis treatment sessions are the most practical solution. DaVita provides dialysis services through network of over 1,800 treatment centers. The company is aggressively expanding operations through its acquisition of NephroLife and its merger with HealthCare Partners Holdings.

Recent SEC filings show that Warren Buffett's Berkshire Hathaway is buying shares of DaVita (NYSE:DVA). Reviewing the financials of the company, it is easy to see its value. This is a classic Buffett stock. Over the last decade, the company has consistently produced significant free cash flow. Throughout this time period, earnings and revenue have grown. The company has a strengthening balance sheet, and it has demonstrated its ability to maintain profit margins.

DaVita is a provider of kidney dialysis services. Chronic kidney disease has no cure, and severe cases require dialysis (the filtering of the patient's blood). While kidney transplants are preferable, there is a shortage of available kidneys. Regularly scheduled dialysis treatment sessions are the most practical solution. DaVita provides dialysis services through network of over 1,800 treatment centers. The company is aggressively expanding operations through its acquisition of NephroLife and its merger with HealthCare Partners Holdings.

Complete Story »]]>
DVAAndrew BoralLeveraged Loan Updatehttp://seekingalpha.com/article/911281-leveraged-loan-update?source=feed_author_andrew_boral
911281
Since writing two articles on leveraged loans (Part 1 and Part 2), these closed end funds and ETFs have performed nicely. The speculative grade market emerged from the financial crises as a strong asset class. Irrelevant of the choice of fund, most of loan funds performed well. Even a laggard, PHD, returned over 13% this year and additionally paid a dividend of 6.4%. Yet the economy is cyclical. It is prudent to re-evaluate these investments.

Predictions for the year ahead by the rating agencies are still good. These predictions are usually accurate in forecasting the performance of these assets. The rating agencies also indicate that some warning signs are emerging. Despite these early warning signs, in the near term these funds could continue to produce solid dividends and returns for investors.

Since writing two articles on leveraged loans (Part 1 and Part 2), these closed end funds and ETFs have performed nicely. The speculative grade market emerged from the financial crises as a strong asset class. Irrelevant of the choice of fund, most of loan funds performed well. Even a laggard, PHD, returned over 13% this year and additionally paid a dividend of 6.4%. Yet the economy is cyclical. It is prudent to re-evaluate these investments.

Predictions for the year ahead by the rating agencies are still good. These predictions are usually accurate in forecasting the performance of these assets. The rating agencies also indicate that some warning signs are emerging. Despite these early warning signs, in the near term these funds could continue to produce solid dividends and returns for investors.

Complete Story »]]>
EFRJFRJROPHDAndrew BoralAflac's Attractive Fundamentals And Its Growing Valuehttp://seekingalpha.com/article/910941-aflacs-attractive-fundamentals-and-its-growing-value?source=feed_author_andrew_boral
910941
There have been many positive articles written about AFLAC (NYSE:AFL) in the past year. However, not much has been written about the company's positive fundamentals. The company has a strong balance sheet that has been steadily improving over the last eight years. There has been solid revenue and earnings growth. Each year the company generated a solid amount of free cash flow. And 2011 was an extraordinarily good free cash flow year.

For those of you who passed on AFLAC due to concerns over Europe, AFLAC deserves a second look. A number of readers have pointed out that AFLAC has European debt in its investment portfolio. The latest annual report does address this issue. In it, management breaks out its exposure to Peripheral European countries. The peripheral countries of interest are Portugal, Ireland, Greece, Italy, and Spain. The exposure to this region amounted to 6.8% of AFLAC's investment portfolio. Over

There have been many positive articles written about AFLAC (NYSE:AFL) in the past year. However, not much has been written about the company's positive fundamentals. The company has a strong balance sheet that has been steadily improving over the last eight years. There has been solid revenue and earnings growth. Each year the company generated a solid amount of free cash flow. And 2011 was an extraordinarily good free cash flow year.

For those of you who passed on AFLAC due to concerns over Europe, AFLAC deserves a second look. A number of readers have pointed out that AFLAC has European debt in its investment portfolio. The latest annual report does address this issue. In it, management breaks out its exposure to Peripheral European countries. The peripheral countries of interest are Portugal, Ireland, Greece, Italy, and Spain. The exposure to this region amounted to 6.8% of AFLAC's investment portfolio. Over

I've analyzed several sporting apparel names including Nike (NYSE:NKE), Adidas (NYSE:ADS), Under Armor (NYSE:UA), Columbia Sportswear Company (NASDAQ:COLM), and Crocs (NASDAQ:CROX). The hottest name in the industry is Under Armor. Its' stock price rose over 3% yesterday. And the name attracts awe with investors for good reason. Since 2009 their stock has nearly tripled while stalwart Nike has had basically had no return.

The top line revenue growth at Under Armor has been astounding. Over the last 10 year period they have multiplied revenue by ten times the size of their revenue ten years ago. That is impressive by any measure. While growth multiples are sure to level off, it easy to see that Under Armor has built up momentum.

Last year Under Armor's revenue was only one tenth of Nike's. Nikes revenue was almost $21 billion while Under Armor's sales were $1.5 billion. And it was only half

I've analyzed several sporting apparel names including Nike (NYSE:NKE), Adidas (NYSE:ADS), Under Armor (NYSE:UA), Columbia Sportswear Company (NASDAQ:COLM), and Crocs (NASDAQ:CROX). The hottest name in the industry is Under Armor. Its' stock price rose over 3% yesterday. And the name attracts awe with investors for good reason. Since 2009 their stock has nearly tripled while stalwart Nike has had basically had no return.

The top line revenue growth at Under Armor has been astounding. Over the last 10 year period they have multiplied revenue by ten times the size of their revenue ten years ago. That is impressive by any measure. While growth multiples are sure to level off, it easy to see that Under Armor has built up momentum.

Last year Under Armor's revenue was only one tenth of Nike's. Nikes revenue was almost $21 billion while Under Armor's sales were $1.5 billion. And it was only half

Complete Story »]]>
ADSCOLMCROXNKEUAAndrew BoralIs Morgans Hotel Group Still A Good Short?http://seekingalpha.com/article/366431-is-morgans-hotel-group-still-a-good-short?source=feed_author_andrew_boral
366431
Over the past year the short interest in Morgans Hotel Group Co (NASDAQ:MHGC) has grown from 1.4 million shares to 2.4 million shares. Short interest peak at 3 million in September. It is currently down from that peak. However, there is still good reason to be wary of this stock. And perhaps there is further downside to be realized. An examination of the company's balance sheet and income statement reveal significant problems. Also, when compared with MHGC's peers, the comparison sheds further light on the company's problems.

Poor Quality Balance Sheet

The hotel industry has had a difficult time during the global recession. Occupancy rates have fallen, and average dollar rate earned has also fallen. The impact this macro trend has had on MHGC is not good. Morgans has not posted an annual profit since 2005. Thus the company has a negative net worth and negative retained earnings. The amount

Over the past year the short interest in Morgans Hotel Group Co (NASDAQ:MHGC) has grown from 1.4 million shares to 2.4 million shares. Short interest peak at 3 million in September. It is currently down from that peak. However, there is still good reason to be wary of this stock. And perhaps there is further downside to be realized. An examination of the company's balance sheet and income statement reveal significant problems. Also, when compared with MHGC's peers, the comparison sheds further light on the company's problems.

Poor Quality Balance Sheet

The hotel industry has had a difficult time during the global recession. Occupancy rates have fallen, and average dollar rate earned has also fallen. The impact this macro trend has had on MHGC is not good. Morgans has not posted an annual profit since 2005. Thus the company has a negative net worth and negative retained earnings. The amount

Complete Story »]]>
HOTMARRLHWOLFMHGCAndrew Boral5 ETFs To Consider For Protection Against Inflationhttp://seekingalpha.com/article/343931-5-etfs-to-consider-for-protection-against-inflation?source=feed_author_andrew_boral
343931
The Treasury as well as other central banks continue to pump liquidity into the markets. Gold prices have zoomed upward over the past few years. This commodity is primarily viewed as an inflation hedge. Given the huge rally in gold, this has forced investors to search for other inflation-hedged investments. Are there any other alternatives to inflation protection? Besides gold, it is possible to buy the U.S. inflation-protected securities as well as international inflationary protected securities. The U.S. TIPs are accessible individually or through an ETF, while the international inflation securities are best accessed through an ETF.

This inflation indexed security fund is not invested in any non-investment grade countries. Yet it does have a basket of 15% non-rated securities in countries such as Brazil, Chile and Italy. The biggest exposures are to Brazil which has a Baa2 and the United Kingdom for the

The Treasury as well as other central banks continue to pump liquidity into the markets. Gold prices have zoomed upward over the past few years. This commodity is primarily viewed as an inflation hedge. Given the huge rally in gold, this has forced investors to search for other inflation-hedged investments. Are there any other alternatives to inflation protection? Besides gold, it is possible to buy the U.S. inflation-protected securities as well as international inflationary protected securities. The U.S. TIPs are accessible individually or through an ETF, while the international inflation securities are best accessed through an ETF.

This inflation indexed security fund is not invested in any non-investment grade countries. Yet it does have a basket of 15% non-rated securities in countries such as Brazil, Chile and Italy. The biggest exposures are to Brazil which has a Baa2 and the United Kingdom for the

Complete Story »]]>
LTPZSTPZTIPZWIPITIPAndrew BoralBankruptcy Model Predictions About Research In Motionhttp://seekingalpha.com/article/322743-bankruptcy-model-predictions-about-research-in-motion?source=feed_author_andrew_boral
322743
The latest news for Blackberry [Research In Motion (RIMM)] has not been all that positive. The top management is going through transitions. Meanwhile, Apple's (OTC:APPL) iPhone and Google's (NASDAQ:GOOG) Android phones are having fantastic years. Blackberry is a pure play in the phone business. Rather than single product companies, Apple and Google make products in diverse electronics and software areas. This makes the oligopoly comparison more difficult. Other weaker players such as Nokia (NYSE:NOK) and Sony Ericson (NASDAQ:ERIC) seem to be smaller niche players now. They once were powerhouses and innovators in the cell phone market. Will Blackberry become as irrelevant as Nokia and Telefonaktiebolaget LM Ericsson or just Ericsson? The marketplace has changed dramatically. In this article, the Z-Score model for bankruptcy will be applied to see how bad things are getting for Blackberry. Each ratio will be analyzed. Hopefully, using the trends in this model's score will shed ]]>
Fri, 27 Jan 2012 15:00:11 -0500Andrew Boral
By Andrew Boral:

The latest news for Blackberry [Research In Motion (RIMM)] has not been all that positive. The top management is going through transitions. Meanwhile, Apple's (OTC:APPL) iPhone and Google's (NASDAQ:GOOG) Android phones are having fantastic years. Blackberry is a pure play in the phone business. Rather than single product companies, Apple and Google make products in diverse electronics and software areas. This makes the oligopoly comparison more difficult. Other weaker players such as Nokia (NYSE:NOK) and Sony Ericson (NASDAQ:ERIC) seem to be smaller niche players now. They once were powerhouses and innovators in the cell phone market. Will Blackberry become as irrelevant as Nokia and Telefonaktiebolaget LM Ericsson or just Ericsson? The marketplace has changed dramatically. In this article, the Z-Score model for bankruptcy will be applied to see how bad things are getting for Blackberry. Each ratio will be analyzed. Hopefully, using the trends in this model's score will shed

Complete Story »]]>
ERICGOOGNOKBBRYAndrew BoralWhat Can Be Learned From Hostess Brands' Bankruptcy?http://seekingalpha.com/article/319937-what-can-be-learned-from-hostess-brands-bankruptcy?source=feed_author_andrew_boral
319937
When Irving, Texas-based Hostess Brands filed for Chapter 11 protection in U.S. Bankruptcy Court in New York, many parents cheered. Even though a Chapter 11 filing means reorganization and not liquidation, Hostess Brands will be forced to rethink its corporate strategy. Naturally, Hostess Brands will continue manufacturing, running outlet stores, and delivering goods throughout the bankruptcy hearing.

For the past several years, Hostess Brands has been living in a bubble.

There has been a dramatic shift toward healthy eating in the United States. Campbell Soup (NYSE:CPB) has identified the demographic transition by revitalizing its V-8 brands with good tasting products like Fusion and Splash. Whole Foods (NASDAQ:WFM) has specialized in distributing organic foods. These grocery markets are usually filled with customers.

In contrast, Hostess Brands has not changed its food lineup much in its 100-year history. Hostess Brands makes bread and snack cakes such as Hostess Cupcakes, Twinkies, Ho Hos,

When Irving, Texas-based Hostess Brands filed for Chapter 11 protection in U.S. Bankruptcy Court in New York, many parents cheered. Even though a Chapter 11 filing means reorganization and not liquidation, Hostess Brands will be forced to rethink its corporate strategy. Naturally, Hostess Brands will continue manufacturing, running outlet stores, and delivering goods throughout the bankruptcy hearing.

For the past several years, Hostess Brands has been living in a bubble.

There has been a dramatic shift toward healthy eating in the United States. Campbell Soup (NYSE:CPB) has identified the demographic transition by revitalizing its V-8 brands with good tasting products like Fusion and Splash. Whole Foods (NASDAQ:WFM) has specialized in distributing organic foods. These grocery markets are usually filled with customers.

In contrast, Hostess Brands has not changed its food lineup much in its 100-year history. Hostess Brands makes bread and snack cakes such as Hostess Cupcakes, Twinkies, Ho Hos,

Complete Story »]]>
CPBWFMMCDAndrew BoralLeveraged Loan Investments: CEF And ETF Possibilities, Part IIhttp://seekingalpha.com/article/319332-leveraged-loan-investments-cef-and-etf-possibilities-part-ii?source=feed_author_andrew_boral
319332<< Return to Part I

In a recent article, I discussed the merits of the multiple avenues for investing in senior secured loans. In fact, the number of CEFs investing in the bank loan market is more numerous than the listing in the first article was able to cover. This article is a continuation of the first, and details six additional CEFs.

As an investment vehicle, CEFs have a stable capital base given that a fixed number of shares exist. They may trade at either a premium or discount to the fund's net asset value. Buying a CEF at a discount to its NAV is desirable. One additional advantage of CEFs is that they can use leverage and access illiquid securities markets. The leveraged loan market lends is less liquid than the equity market. Leveraged loans are primarily accessible only to institutional investors. Another benefit of the CEF format

In a recent article, I discussed the merits of the multiple avenues for investing in senior secured loans. In fact, the number of CEFs investing in the bank loan market is more numerous than the listing in the first article was able to cover. This article is a continuation of the first, and details six additional CEFs.

As an investment vehicle, CEFs have a stable capital base given that a fixed number of shares exist. They may trade at either a premium or discount to the fund's net asset value. Buying a CEF at a discount to its NAV is desirable. One additional advantage of CEFs is that they can use leverage and access illiquid securities markets. The leveraged loan market lends is less liquid than the equity market. Leveraged loans are primarily accessible only to institutional investors. Another benefit of the CEF format

Complete Story »]]>
AFTTLIBGTFRAVVRAndrew BoralHas The Debt Crisis Sentenced Luxury Brand Makers To A Few Bad Quarters?http://seekingalpha.com/article/318968-has-the-debt-crisis-sentenced-luxury-brand-makers-to-a-few-bad-quarters?source=feed_author_andrew_boral
318968
Are you looking for after holiday sales? In these difficult times, what lessons can be learned from Steuben about other luxury brand manufacturers. If you are one of the lucky few to have received the gift of Steuben glass, you can appreciate it as an icon of the wealthy. This American brand was the gift of choice for many United States diplomats seeking to impress their foreign counterparts. Steuben was spun-off from Corning (NYSE:GLW) a few years ago. While GLW directed its efforts toward high tech glass for televisions and fiber optics, Steuben focused its expertise in the glassmaking of creating artistic glass. Unfortunately, as of recently this high-end luxury brand will no longer exist.

Is Baccarat SA (BCRA.PA) the next luxury brand to fall? At €139 Baccarat is trading closer to its 52-week low of €125 than its 52-week high of €185. While Baccarat’s distinguished heritage is remarkable, so

Are you looking for after holiday sales? In these difficult times, what lessons can be learned from Steuben about other luxury brand manufacturers. If you are one of the lucky few to have received the gift of Steuben glass, you can appreciate it as an icon of the wealthy. This American brand was the gift of choice for many United States diplomats seeking to impress their foreign counterparts. Steuben was spun-off from Corning (NYSE:GLW) a few years ago. While GLW directed its efforts toward high tech glass for televisions and fiber optics, Steuben focused its expertise in the glassmaking of creating artistic glass. Unfortunately, as of recently this high-end luxury brand will no longer exist.

Is Baccarat SA (BCRA.PA) the next luxury brand to fall? At €139 Baccarat is trading closer to its 52-week low of €125 than its 52-week high of €185. While Baccarat’s distinguished heritage is remarkable, so

Complete Story »]]>
TIFCOHBIDGLWAndrew Boral6 Retailers: An Evaluation Of Growth + Incomehttp://seekingalpha.com/article/318793-6-retailers-an-evaluation-of-growth-income?source=feed_author_andrew_boral
318793
In this article, six retailers are examined. Each of the retailers is reasonably liquid and, given their track records, trade for acceptable multiples of earnings. Each of the stocks has appreciation potential. Yet investors seeking income in addition to growth may want to avoid Bed Bath & Beyond (NASDAQ:BBBY) and Dollar Tree (NASDAQ:DLTR) as these stocks do not pay a dividend. Williams-Sonoma (NYSE:WSM) pays the highest dividend of the retailers while also having the highest dividend payout ratio. As this article examines each of these companies in detail, the Williams-Sonoma dividend seems sustainable given the level of capital expenditures.

Click to enlarge:

The table below gives some summary valuation statistics. It is clear that Williams-Sonoma is the smallest company by market capitalization. The next largest, Family Dollar Stores (NYSE:FDO), received a buyout offer for $7 billion. Unfortunately this transaction has not materialized. That would have provided a nice premium to

In this article, six retailers are examined. Each of the retailers is reasonably liquid and, given their track records, trade for acceptable multiples of earnings. Each of the stocks has appreciation potential. Yet investors seeking income in addition to growth may want to avoid Bed Bath & Beyond (NASDAQ:BBBY) and Dollar Tree (NASDAQ:DLTR) as these stocks do not pay a dividend. Williams-Sonoma (NYSE:WSM) pays the highest dividend of the retailers while also having the highest dividend payout ratio. As this article examines each of these companies in detail, the Williams-Sonoma dividend seems sustainable given the level of capital expenditures.

Click to enlarge:

The table below gives some summary valuation statistics. It is clear that Williams-Sonoma is the smallest company by market capitalization. The next largest, Family Dollar Stores (NYSE:FDO), received a buyout offer for $7 billion. Unfortunately this transaction has not materialized. That would have provided a nice premium to

Complete Story »]]>
BBBYCOSTDLTRFDOTGTWSMAndrew BoralLeading Consumer Products Companies Have Attractive Yields and Growthhttp://seekingalpha.com/article/317845-leading-consumer-products-companies-have-attractive-yields-and-growth?source=feed_author_andrew_boral
317845
There has been a lot of talk of dividends in the media recently. This is quite understandable. Long term growth of the major U.S. indices has been disappointing. Income has been the main source of stock market returns. And the aging investment population needs income and growth that the bond market is simple not providing in the current market.

Investors have learned many lessons in the financial crisis of 2007-2008. Firstly, consumers have a positive savings rate for the first time in a number of years. Second, banks are less willing to extend credit to high risk borrowers. This bodes well for the consumer staples industry. Consumers are focusing on necessities. It is unlikely that there will sudden changes in demand for these products. The following companies produce necessities appealing to almost everyone and are will have solid demand in most economic situations.

There has been a lot of talk of dividends in the media recently. This is quite understandable. Long term growth of the major U.S. indices has been disappointing. Income has been the main source of stock market returns. And the aging investment population needs income and growth that the bond market is simple not providing in the current market.

Investors have learned many lessons in the financial crisis of 2007-2008. Firstly, consumers have a positive savings rate for the first time in a number of years. Second, banks are less willing to extend credit to high risk borrowers. This bodes well for the consumer staples industry. Consumers are focusing on necessities. It is unlikely that there will sudden changes in demand for these products. The following companies produce necessities appealing to almost everyone and are will have solid demand in most economic situations.

Complete Story »]]>
PGCLCLXCPBHNZAndrew BoralLeveraged Loan Investments: CEF And ETF Possibilities, Part Ihttp://seekingalpha.com/article/316960-leveraged-loan-investments-cef-and-etf-possibilities-part-i?source=feed_author_andrew_boral
316960
A few years ago, the primary way of gaining exposure to leveraged loans was through Collateralized Loan Obligations (CLO). The 2007-2008 crises changed the way investors buy portfolios of leveraged loans. 2011 closed the year with approximately $11 billion in CLO issuance. 2011 volume is far below the peak issuance of $120 billion in 2006. Investments in leveraged loans transitioned away from CLOs and toward more traditional investment funds.

Even though CLOs are no longer the vehicle of choice, a solid rationale for investing in leveraged loans remains. Moody’s forecast the speculative grade default rate to remain low. As the economy continues to slowly recover and companies continue to decrease leverage, it is likely that the default stays at approximately 2% for some time. Given the ratings of BA and B on leveraged loans, a low expected default rate is critical. Additionally, many of these leveraged loans have strict covenant

A few years ago, the primary way of gaining exposure to leveraged loans was through Collateralized Loan Obligations (CLO). The 2007-2008 crises changed the way investors buy portfolios of leveraged loans. 2011 closed the year with approximately $11 billion in CLO issuance. 2011 volume is far below the peak issuance of $120 billion in 2006. Investments in leveraged loans transitioned away from CLOs and toward more traditional investment funds.

Even though CLOs are no longer the vehicle of choice, a solid rationale for investing in leveraged loans remains. Moody’s forecast the speculative grade default rate to remain low. As the economy continues to slowly recover and companies continue to decrease leverage, it is likely that the default stays at approximately 2% for some time. Given the ratings of BA and B on leveraged loans, a low expected default rate is critical. Additionally, many of these leveraged loans have strict covenant

Complete Story »]]>
PHDJFREFREFTJROBKLNAndrew BoralAre Short Treasury ETFs Due For A Rebound?http://seekingalpha.com/article/316236-are-short-treasury-etfs-due-for-a-rebound?source=feed_author_andrew_boral
316236At first glance, these ETFs seem like a simple way to hedge against rising interest rates.Upon further inspection, these funds should come with a warning label.Modern financial engineering can make even the safest investments risky.Even when most professionals agree that there is nowhere for interest rates to go but up, speculating on yield curve changes is not for the faint hearted.The performance of the ProShares Short Treasury ETFs has lagged.

Specifically, ProShares created several different short ETFs which are: TBF, TBX, TBT, TBZ, PST, and TPS.These ETFs allow investors to short the medium to long end of the yield curve as well as the inflation protected market.Both levered and unlevered forms exist.In 2011, the short ETFs performed poorly.In particular, the best performing Short Treasury ETF dropped by 14.2%while the worst performing ETF dropped by 48.9%.

At first glance, these ETFs seem like a simple way to hedge against rising interest rates.Upon further inspection, these funds should come with a warning label.Modern financial engineering can make even the safest investments risky.Even when most professionals agree that there is nowhere for interest rates to go but up, speculating on yield curve changes is not for the faint hearted.The performance of the ProShares Short Treasury ETFs has lagged.

Specifically, ProShares created several different short ETFs which are: TBF, TBX, TBT, TBZ, PST, and TPS.These ETFs allow investors to short the medium to long end of the yield curve as well as the inflation protected market.Both levered and unlevered forms exist.In 2011, the short ETFs performed poorly.In particular, the best performing Short Treasury ETF dropped by 14.2%while the worst performing ETF dropped by 48.9%.